My flat just MOP, what are my options?

HDB Resale Minimum Occupation Period MOP

Congratulations on your HDB flat reaching the Minimum Occupation Period or the MOP !

If you got a BTO, it's probably been 8 - 9 years since you applied for one. (i.e. 5 years since you collected your keys, 2-3 years since you got a ballot queue number and about a year applying for and getting the news that you have a queue number to select a flat) and hey you deserve more than a pat on the back for your patience ! BTO flats usually appreciate by the time they reach the MOP and owners who choose to sell would probably be able to get some cash out of their investment after deducting the outstanding loan and the CPF refund.

For resale flats, it's probably around 5-6 years since you've decided to get one. Profits, however, depends on how long ago you purchased the flat and the price that you paid for it. Demand for resale flats are picking up although prices are not as high as during the peak. 

But enough about the state of the market . 

Although the end of the MOP signals that you can sell off your flat, the focus should not just be on how much cash you can get out of it. Instead, the focus should be on how to use what you have to profit further, or at least put it into another investment vehicle which can give you better returns. 

At present, you may be confused about the choices that you have. Should you upgrade, should you downgrade? Will you get the same kind of profit appreciation if you stay put? Is there a chance that the profit might decrease?
Are there any other housing types which will allow you to experience the same kind of appreciation that you got with that BTO? 

If these are your concerns and you’re wondering, “ What should I do next?”, read on.

What Are Your Choices Once your HDB BTO reaches MOP? 

1) Review your family situation ( and finances) to see if there is a need to rightsize /upgrade /downgrade to a bigger or smaller flat.

HDB resale calculations

For most of our clients, having a comfortable home for their family is the priority. Since the time you bought the flat, your family size and structure may be very different from what it is now. Whether it's because your family has grown, whether its because your children have left the nest, or that your parents have moved in with you, we understand your need for a change. 

If you are looking for a bigger flat to accommodate a growing family or so that you can bring your parents to live with you, you might want to consider a resale flat in a mature estate. The size of a resale flat is typically larger in a mature estate where you would see flat types like Executive Apartments, Maisonettes, or even 5A size flats that suit your growing family. On the flip side, if you are downgrading, you might want to consider 3 room flats in a mature estate or even a 2-room flexi direct from HDB. 

2) Move closer to your parents and enjoy a $20 000 discount off your next resale flat (i.e. the Proximity Grant)

Proximity Grant HDB

Even if your parents aren’t keen to move out of their home, you can do them a favour and move closer to them. In fact, the Government encourages this and is willing to put their money where their mouth is.

The $20 000 Proximity Housing Grant (PHG) is a one time grant for Singapore Citizens who move within 2km to their parents or to the estate where their parents live in.
Can't decide between which parent to move closer to? Move closer to one set of parents and then move your in-laws closer to you. (Parents can also receive the $20 000 grant by moving close to their married children! ) This solution is perfect if one set of parents wants to downgrade - however, not all estate have smaller flats, so do your planning first. For e.g, Pasir Ris Estate does not have 3 room flats apart from the ones in Pasir Ris One.

3) Upgrade to an EC while there still are ECs without the Resale Levy

EC without Resale Levy Executive Condo

​If you want to upgrade your lifestyle by living in a development with facilities, but do not want to be tied down with a huge mortgage, you might want to consider getting an EC. Since you have purchased a flat directly from HDB , you will be subjected to the resale levy of between $15000 to $55 000.

Why should you consider purchasing an EC? Apart from the facilities, you enjoy a fully renovated & move in ready unit in a brand new development. Prices of ECs also usually rise substantially after the 5 and 10 year mark, making it a good alternative to stagnant resale prices. Read more about Executive Condos here. 

4) Get an investment property while the private market is stagnant

New Launch Investment Property SG

We Asians love our properties. In fact, it is usually the ultimate dream to grow our wealth by owning multiple properties and renting it out for passive income.

If this is your goal as well, you might want to take a look at the available properties on sale while the market is cool. 

If you’ve been keeping up with Singapore Property News, you should know that the cooling measures has done its job pretty well to keep the market stable and to make prices slowly decline. Although the prices have not drastically dropped, there are bargains out there if you know where to look.

This might be your opportunity to get an investment property to rent out while the market is cool. You may also choose to purchase a condo or a landed property for your family to live in while  you rent out your HDB.

Worried about the slow rental market? Get a new launch condo to ride it out and pay only a fraction of the monthly mortgage i.e the progressive payment plan, while the development is still under construction.

Progressive payment schedule for new launches

Example of a progressive payment plan based on a $700 000 unit at an interest rate of 1.8%.

5) Stay put and enjoy the capital appreciation of your flat! 

HDB Appreciation

If you bought the BTO during the launch, it is highly likely that you have enjoyed capital appreciation, i.e. the value of your flat has risen and you will be able to make a profit when you sell it off.  Since this remains 'virtual money' until you cash it out, some might prefer to sell and use the profits for another property which would experience another capital appreciation

If this is not your strategy, then sit back and enjoy the capital appreciation while the price of your home remains stable! 

We understand that real estate is a huge investment. If you are still unclear about what to do next, we are here to help. 

Send us a msg if you'd like to find out more about the following : 

1) Current valuation of your flat 

2) Which step would be most suitable for you and your family? 

Even if you still haven't made up your mind regarding what to do next, don't worry about it. We are here to answer your queries.  

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